Having the Best Stock Brokers for short selling to choose from will help traders achieve their goals more effectively. Traders Union analysts have prepared an article to help you choose the best option. The experts selected 5 companies, compared them between each other and gave scores. Using the results of the analysis, traders can find the information they need about the Best Stock Brokers for short selling in 2024.
What is Short Selling?
Short Selling is when a trader borrows an asset to sell it and buy back later at a lower price. These kinds of positions can be opened in the stock, Forex, futures and other markets.
Under the rules of financial markets, traders cannot trade assets or contracts they don’t own. Short Selling involves a trader borrowing an asset from a broker and selling it at a high price. Then, they wait for the price to fall. Closing the position, a trader buys back the asset at a low price. The difference between the high price of sale and low price of buying is the profit a trader makes. If the price of an asset increases instead of falling, a trader suffers a loss.
Short selling occurs when the price of an asset is expected to fall. However, in the case of stocks, not all brokers allow short selling. Therefore, if your trading strategy includes short selling, it is important that you choose a broker that provides such an option.
1
eToro - Best Stock Broker in 2024
You can use eToro to invest in more than 3,000 stock assets, including at zero fee. The minimum deposit and leverage vary depending on the country of registration of a trader. Trading is available in mobile apps and on the web platform on any device. You can deposit and withdraw money via bank transfer and electronic payment systems. The broker offers margin trading, various bonuses and partner rewards.
2
eOption - Best Stock Broker in 2024
As an eOption client, you can trade options, stocks, listed bonds, fixed income assets, and ETFs. At the same time, the broker is focused on traders who use option strategies. The commission for derivative financial instruments trading is 10 cents per contract and that is lower than its competitors, plus $1.99 per trade. There is no minimum value for US residents to open a cash account. A deposit for international accounts is required from $25,000, and $2,000 for margin accounts. The new account shall be replenished within 60 days from the date of opening, otherwise, the broker may close it.
3
Interactive Brokers - Best Stock Broker in 2024
Interactive Brokers is militantly developing, offering services to investors regardless of their trading experience. For this purpose, the broker doesn’t ask for a fixed minimum deposit but has margin requirements for accounts of various structures to make trading financially safe. The size of the leverage and Margin call and Stop out levels depends directly on the asset that the client is trading.
4
Wealthsimple - Best Stock Broker in 2024
Wealthsimple offers asset portfolio management services to investors. All transactions and payment operations can be tracked in the personal account on the website and in the mobile app. Clients can invest only their capital. Borrowed funds (margin trading) are not provided by the broker. Three account types are available: basic accounts that allow you to start with any amount; premium accounts starting from £100,000 (black account) or £500,000 (generation account).
5
SoFi Invest - Best Stock Broker in 2024
SoFi Invest offers a convenient application for trading and investing in stocks, cryptocurrencies, ETFs, and IPOs. No commission is charged for trades in stocks and ETFs. Also, with zero commissions, the investor can purchase fractional shares of Stock Bits. SoFi Invest does not have a minimum deposit, however, Pattern Day Traders should have at least $25,000 on their account. Otherwise, the account may be limited under FINRA’s daily trading margin requirements. Pattern Day Trader consists of traders who trade securities four or more times within five business days, and the number of daily transactions is more than 6% of the total trading activity for the same period. The minimum order size for the purchase of cryptocurrency is $10, and the maximum is $50,000 per client per day.
Best Stock Broker for short selling: Investment Programs
Earning passive income is just as important for traders as earning profit by actively trading. Therefore, it is important to consider investment instruments offered by the company. There are different investment programs and their choice strongly depends on a specific broker. TU analysts have prepared a review of investment programs of the 5 best brokers.
1
eToro - Investment Programs
Investment Programs, Available Markets, and Products of the Broker
With investment offers of eToro, the broker’s clients can earn passive income without trading financial instruments on their own. It is also possible to earn additional income on the partnership program.
Smart Portfolio, CopyTrader and Popular Investor
eToro specializes in social trading, which means it offers the best conditions for comfortable work of trading signal providers and their subscribers. Not only successful traders, but also novice investors with this broker. At the moment, the following investment solutions are available on eToro:
Smart Portfolio. These are long-term investment portfolios that consist of various assets. The portfolios are built by investment experts, who are also involved in their management and rebalancing.
CopyTrader. This is a service for copying trades of successful traders. An investor who subscribed to a strategy pays the standard trading fee. There are no additional fees. The minimum amount for copying a position is $1.
Popular Investor. This is an offer for traders who have traded financial instruments successfully for at least 2 months and are prepared to offer their strategy for copying by other eToro clients. There are 4 levels available: Cadet, Champion, Elite and Elite Pro with different percentages of profit.
Every investment program of eToro implies a deposit of a certain amount to the trader's account. In order to start working with Smart Portfolio, you need to deposit at least $500. The minimum account balance for the Popular Investor program is $1,000. In order to connect to the CopyTrader platform, you need $200 or more.
If you are a large investor and plan on investments over $10,000, contact us at vip-invest@tradersunion.com or by the feedback form on our website. Our professional team will take you through all the intricacies of thedeal and all the steps from signing up to withdrawal of profits.
eToro Partnership Program:
eToro shares with partners a part of its income from the new users who opened an account with the broker using a referral link. The rewards depend on the CPA indicators. There are three commission plans with monthly rewards of $100, $200 and $250.
The broker starts paying the rewards only after receiving at least $10 in fees from the referred users. A partner can use various methods of promotion – publish direct links and banners, send newsletters and ads by email, etc.
2
eOption - Investment Programs
Investment Programs, Available Markets, and Products of the Broker
The eOption broker is focused on trading options for active traders. The broker offers them the lowest commissions. At the same time, the broker maintains the automatic trading function, which enables the investor to make a profit without making trades on his own.
Auto Trading is an investment solution for generating passive income
Clients who subscribe to Auto Trading services choose one or more among 36 suggested trading signal providers. After that, eOption starts auto-trading to sell or buy securities following the parameters set by the investor. Here are some of the features offered by eOption’s Auto Trading program:
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The broker or other party cannot start, stop or change the auto-trading status. If the subscription period for signals has not expired and there are funds on the account, then the decision to suspend trading shall be made by the investor himself.
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All funds are under your total control. Subscribers can set the maximum trade size based on the USD amount, the number of contracts, the account balance percentage, and can start or stop the service at any time.
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The broker doesn’t charge any auto-trading commissions. However, orders made by the Auto Trade Desk without the investor’s intervention shall be subject to a rate of $2.00 for stocks and $3.99 + 10 cents per contract for options.
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After you open a brokerage account and pass verification, you can connect to the Auto Trading service online.
The eOption broker doesn’t verify, monitor, or evaluate the trading signals supplied, but acts as an executing broker following the specific Auto Trading Service instructions. The investor himself chooses the auto trading concept that is most compatible with his investment strategy.
If you are a large investor and plan on investments over $10,000, contact us at vip-invest@tradersunion.com or by the feedback form on our website. Our professional team will take you through all the intricacies of thedeal and all the steps from signing up to withdrawal of profits.
Affiliate program from eOption:
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Affiliate program. Here, an affiliate will get up to $100 for each attracted client who has replenished a trading account for $2,000 or more. Also, if the partner's account balance is over $2,000, the client and the referral receive two free BUZZ shares.
Participation in the affiliate program enables eOption clients to get monetary rewards from the company for attracting new users.
3
Interactive Brokers - Investment Programs
Investment Programs, Available Markets and Products of the Broker
Interactive Brokers casts itself as an investment center, but there are no programs customary to novice investors like PAMM accounts, transactions copying services. Investments are possible by investing in stocks, bonds, and ETFs, earning dividends from them, or subsequent sales at a higher price. The broker offers a portfolio constructor based on a variety of parameters to create an optimal portfolio. Investors also have access to investments in over 34 thousand mutual funds. Big business professionals can invest in hedge funds.
Important!
If you are a large investor and plan on investments over $ 10,000, contact us at vip-invest@tradersunion.comor by the feedback form on our website. Our professional team will take you through all the intricacies of thedeal and all the steps from signing up to withdrawal of profits.
Interactive Brokers affiliate program
Commercial referral program. The partner's challenge is to attract new customers using a unique link, and the partner shall get a fixed amount of $200 for each client attracted.
Referral program with extras. The partner's challenge is the same as in the commercial referral program. The only difference is that now the referrer (partner) gets a percentage of the trading commission that the client invited pays to the broker. Payments are made for 3 years.
There is no need to be a client of Interactive Brokers or be an active trader to participate in the affiliate programs. It is enough to meet the broker's requirements for partners.
4
Wealthsimple - Investment Programs
Investment Programs, Available Markets, and Products of the Broker
Wealthsimple offers passive investment through investments in managed portfolios. They are formed based on the data specified by the investor, such as objectives, time horizon, and the customer’s attitude toward risk.
Investing on autopilot: A picture-perfect way to get passive income on the stock market
Wealthsimple offers its clients well-balanced portfolios with different risk levels. Each of them is diversified and contains from 10 to 15 funds in a certain segment. If the market situation changes, portfolios are rebalanced automatically. The investor does not participate in this process. Wealthsimple offers the following portfolio types:
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Socially (SRI) and non-socially responsible investing portfolios. The fees charged by ETF managers of SRI portfolios range from 0.22% to 0.32%. The minimum investment in SRI funds is £5,000. Management fees for non-socially responsible investing ETFs are 0.18-0.2%, and the investor may invest any amount.
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Conservative, Balanced, Growth. These are classifications of portfolios based on degrees of risk. The investor himself determines the permissible level. Each investor can have several portfolios with different risk profiles.
To invest in Wealthsimple managed portfolios, you need to answer several questions in the registration form. Based on this data, the algorithm will propose the optimal portfolio for you. The investor may agree to invest in it, apply for another portfolio or contact the company's specialist to create a personalized portfolio.
If you are a large investor and plan on investments over $10,000, contact us at vip-invest@tradersunion.com or by the feedback form on our website. Our professional team will take you through all the intricacies of thedeal and all the steps from signing up to withdrawal of profits.
Wealthsimple’s affiliate program:
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Referral Program. For each friend who opens and deposits £5,000 or more through a referral link, the existing client receives free asset management of £5,000. The referral receives the same remuneration.
Thus, the broker does not charge any fees for its services to the participants of the referral program for 12 months.
5
SoFi Invest - Investment Programs
Investment Programs, Available Markets, and Products of the Broker
SoFi Invest offers asset management services called “Automated Investing”. Investors are connected to the service for free, but they pay basic commissions and expenses for ETF funds.
Automated Investing via robo-consultants without human intervention
A client who wants to invest in stock market instruments informs SoFi Invest of his investment goals and based on that the broker constructs a diversified portfolio. It consists of a wide range of risk mitigation assets. The investor does not need to monitor the market: Automated Investing uses computer algorithms to provide financial advice and manage portfolios.
The main principles of automated investing from SoFi Invest are:
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The broker does not charge any fees for consulting services or asset portfolio management.
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Portfolios are automatically rebalanced quarterly and during market fluctuations. The adjustment of securities is performed by a robotic program.
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There is no minimum amount to start investing. You can invest from 1 USD.
Connecting to the automated investment platform makes it possible to invest money without transferring it to active management. Moreover, such a decision is a way to avoid the occurrence of possible human errors when making an investment decision.
If you are a large investor and plan on investments over $10,000, contact us at vip-invest@tradersunion.com or by the feedback form on our website. Our professional team will take you through all the intricacies of thedeal and all the steps from signing up to withdrawal of profits.
SoFi Invest affiliate program
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Referral program — a partner can receive up to $10,000 per year. The amount of remuneration depends on the recommended service and the number of connected referrals.
A partner can generate referral links with recommendations for personal and student loans, investment products, obtaining a credit card, and opening cash accounts. This offer is not available to customers in Ohio, Michigan, or Vermont.
Summary
Choosing a good broker for short selling is not a simple task. To make it easier, TU experts have prepared this review. Based on the collected information, we have given scores to each company. In the Overall score table, you will learn about the best Stock Broker for short selling in 2024, and also advantages and disadvantages of its closest competitors.
Overall score of the best Stock Brokers for short selling
| eToro | eOption | Interactive Brokers | Wealthsimple | SoFi Invest | |
|---|---|---|---|---|---|
|
Overall score |
9.4 |
9.3 |
9.1 |
9 |
8.8 |
|
Execution of orders |
9.1 |
9 |
8.8 |
8.7 |
8.5 |
|
Investment instruments |
9.7 |
9.6 |
9.4 |
9.3 |
9.1 |
|
Withdrawal speed |
9.5 |
9.4 |
9.2 |
9.1 |
8.9 |
|
Customer Support work |
9.3 |
9.2 |
9 |
8.9 |
8.7 |
|
Variety of instruments |
9 |
8.9 |
8.7 |
8.6 |
8.4 |
|
Trading platform |
9.8 |
9.7 |
9.5 |
9.4 |
9.2 |
|
|
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FAQ
What additional fees are there on short selling?
Traders pay the fee twice in short selling, when they open a position and when they close the position. There can also be a fee for position rollover (swap fee), if the position wasn’t closed by 12:00 am local time.
For how long can a trader hold a position open in short selling?
The time during which a trade can hold a position open depends on the broker. Some brokers impose restrictions, while others allow trading for as long as traders comply with margin requirements.
Does the choice of a beginner differ from the choice of an experienced trader?
Yes. A novice trader should primarily consider the availability of educational tools and a demo account, as well as basic assets. A more experienced trader is interested in wider opportunities on advanced account types, a wider choice of instruments for technical analysis, and a greater number of trading instruments.
What are the risks of trading in the financial markets?
Any trading in the financial markets carries risks of losing your money due to asset volatility. Therefore, it is important to develop the rules of risk management in your strategy and strictly follow them.
Is it possible to work with offshore brokers?
It is best not to work with offshore brokers. However, if you have chosen such a company, you need to check and analyze it very thoroughly. There are offshore brokers with good reputations. Before you start working with such a company, deposit the minimum amount and start trading. Once you’ve worked with the broker for a little while and checked how it operates and how quickly it processes withdrawals, you can start depositing higher amounts.
What is a demo account and why is it important?
On a demo account, you trade by using virtual funds. It is important to choose a broker offering a demo account both for beginners, who are only learning, and for experienced traders, who can use this account type to test new strategies or EAs risk-free.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
The area of responsibility of Mikhail includes covering the news of currency and stock markets, fact checking, updating and editing the content published on the Traders Union website. He successfully analyzes complex financial issues and explains their meaning in simple and understandable language for ordinary people. Mikhail generates content that provides full contact with the readers.
Mikhail’s motto: Learn something new and share your experience – never stop!
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
Olga’s motto: Do well and you’ll be well!